Page 6 - FSUOGM Week 25 2021

FSUOGM COMMENTARY FSUOGM

The head of Naftogaz's

supervisory board pursues

CEO Vitrenko's dismissal

Ukraine's government caused a scandal when it dismissed the widely

respected head of Naftogaz, Andriy Kobolev, in late April

UKRAINE YURIY Vitrenko has only been on the job for a to detect and fight corruption in Ukraine, Vit-
few weeks as the head of Ukraine’s national gas renko said that the company’s team had man-
company Naftogaz but was fired again on June aged to reduce graft sharply in the local gas
16, on technical grounds as a struggle for con- market. It mainly did this by fighting corruption
trol of the country’s leading energy company during procurement by UkrGasVydobuvannya,
continues. which is part of Naftogaz and produces 70% of all
Ukraine’s government caused a scandal gas extracted in the country, and UkrTransGaz,
when it dismissed the widely respected head of Ukraine’s gas transportation system operator.
state-run oil and gas company Naftogaz, Andriy Vitrenko said Naftgogaz had also curbed
Kobolev, on April 29, the day after the company corruption in Ukrnafta, an oil and natural gas
reported losing $684mn in 2020. Kobolev has extraction company that was de facto controlled
overseen the turnaround of the company that by oligarch Ihor Kolomoisky. Naftogaz owns
made it Ukraine’s biggest tax payer and led the 50% of shares plus one in the company.
legal battle against Gazprom that ended with a Vitrenko said that before 2018, when Naf-
payout of $2.6bn in Ukraine’s favour. togaz started to actively defend its rights in the
Kobolev was replaced by his former deputy company, there was a “large-scale withdrawal of
Vitrenko, who quit the company last year after money” from Ukrnafta.
clashing with his former boss. Vitrenko was “Oligarchs and corrupt people have never
appointed CEO of Naftogaz from the office of enjoyed the way we systematically reduced the
acting Energy Minister; however, Vitrenko is space for corruption,” he wrote as cited by the
being fired again, as under Ukrainian law he can- Kyiv Post. “But when you fight corruption, it
not take over as CEO of a public company for a starts fighting you.”
year after quitting the same company. Naftogaz issued the following statement:
The decision to fire Kobolev made by the “Naftogaz continues to follow its strategic vector
Cabinet went down very badly with Ukraine’s and transforms the group to be lean and com-
international donors and is reported to be the petitive in Ukraine’s gas market. To achieve this
reason why US President Joe Biden did not fol- goal, Naftogaz continues to streamline its organ-
low through with a plan to meet Ukrainian Pres- isational structure, distribution of functions and
ident Volodymyr Zelenskiy in person ahead of responsibilities among departments. Trans-
his summit with Russian President Vladimir formation removes overlap in tasks, simplifies
Putin on June 16. interaction among departments, and rearranges
Vitrenko was angered by the decision and the structure to increase the group’s efficiency. A
blamed his old boss Kobolev as being behind number of functions have been already restruc-
the decision, saying on his Facebook page that tured in the integrated gas division, in long-term
Kobolev “organically fits” into today’s Ukrainian planning, market research and long-term fore-
authorities. casting, corporate communications, general
“So, they ‘agreed’ with Kobolev again,” Vit- operating management, etc. The functions of
renko wrote. Analysts speculate that part of the Naftogaz group’s executive officer will be restruc-
reason for Vitrenko's dismissial is vested inter- tured in the same way.”
ests are worried he will crack down on their lucu- “Otto Waterlander, Naftogaz group chief
rative corrupt schemes in the energy sector and operating officer – chief transformation officer,
so have engineered his removal. will be responsible for operations and transfor-
While it is not Naftogaz’s direct responsibility mation processes, including the implementation

P6 www. NEWSBASE .com Week 25 23•June•2021